Sky Is Cleared to Bid for Italian TV Frequencies, Challenging Berlusconi

The European Commission said News Corp.’s Italian unit, Sky Italia SpA, can bid for digital free- to-air frequencies, prompting Mediaset SpA to say it would challenge the ruling in court.

Citing “significant changes” to the Italian market, the commission said it would drop a restriction imposed on Sky Italia when it merged two competing satellite platforms in 2003 and allow it to enter the free-to-air digital market.

“We are obviously very happy with today’s decision,” Tom Mockridge, Sky Italia’s chief executive officer, said in an e- mailed statement today. “If Sky Italia is successful in its digital terrestrial television bid, the Italian consumer stands to gain once again, as do potential advertisers.”

Italian Prime Minister Silvio Berlusconi is the country’s biggest media owner. He controls Mediaset, Italy’s largest private TV broadcaster, which competes with Rupert Murdoch’s Milan-based Sky Italia. This is the latest skirmish between the two companies in their bid to command the majority of the country’s TV advertising market.

In January, the government passed new regulations to limit the maximum amount of advertising per hour of pay television programming, to 12 percent in 2012 from 18 percent last year. Free-to-air broadcast channels, including those on Berlusconi’s network, will be able to increase advertising to a maximum of 20 percent per hour from 18 percent.

After today’s ruling, Mediaset pledged to appeal the ruling at the European Court of Justice.

“This decision authorizes the satellite, pay-TV monopolist” to “operate in the free market and it authorizes it to possess frequencies that are already insufficient for the current operators,” Mediaset said in an e-mailed statement.

To contact the reporters on this story: Steve Scherer in Rome at sscherer@bloomberg.net

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